Do you use price per unit or price per square foot?

Question

Large Duplex sold in Dover NH in 2025 for mid $600’s

Both units have 3 bed/1 bath apartments

Unit conditions are unknown so take it with a grain of salt

325k/unit and approx $190/sqft.

This shows a large disparity between both price per unit and price per square foot. While it’s only a two family, it shows that the price per unit is higher than average in the Dover market—the price per square foot looks to be below market average.

Which metric do you look at when analyzing multifamily properties? Price per unit or price per square foot? What do you think the pros and cons are for each?

Doug Smith · Answer

From a lender's perspective, a duplex is going to be appraised in a similar manner to a single-family, but if you're doing a rental loan such as a DSCR loan, then they will add a "Fannie Mae form 1007" to the appraisal. They will look at the "sales approach" value (price per sf +/- adjustments) and the 1007 market rental value to determine the property's cash flow (DSCR = 1007 rent value / (PITI+HOA)). If you're looking to get cash flow that is positive and ensure you can resell for a decent price, you have to pay attention to both. Does that make sense to you? If you're getting a massive disparity in a bad way for cash flow, then it might not be a good idea. If, however, you're showing great cash flow for the Price-per-sf/sales approach value, then you might have found a gem.

Jakob Mikhitarian · Answer

@Alex Morales Rents for 3/1 in Dover can safely go for $2100

Alex Morales · Answer

I use both but for different stages of analysis.

Price per unit is my quick screening filter - it tells me whether a deal is even in the ballpark for my market before I spend time on deeper analysis. For small multifamily (2-4 units), I track what similar unit counts are trading for in specific neighborhoods. If something is way outside that range, I need to understand why before moving forward.

Price per sqft becomes more important when I'm comparing specific properties or running comps for an ARV estimate. It helps me adjust for size differences between properties. A $325k/unit price on a large duplex with 3/1 units makes more sense when you see the $190/sqft - that's actually reasonable for the space you're getting.

The disconnect you're seeing in Dover probably comes down to room count and layout. Large units with 3 beds command higher total rent even if the sqft isn't proportionally higher. Smaller 1BR units might be more efficient per sqft but you're capped on rental income.

For duplexes specifically, I'd add rent per unit to your analysis. If those 3/1 units are pulling $1,500-1,800/mo each in Dover, you're looking at solid GRM regardless of the price/sqft. That ties back to what Doug mentioned about the 1007 form and DSCR.

What are rents looking like for 3/1 units in that area?